Comcast Business may have established a growing base of business service customers using its Ethernet and fiber-based services, but the cable MSO wants to find a way to develop a retail version of its Ethernet over HFC product with higher speeds.
Similar to fellow cable MSOs Cox and WOW!, Comcast Business has mainly marketed its EoHFC other carriers as a wholesale product.
Jeff Lewis, vice president for data product management at Comcast Business, told FierceTelecom that the service provider sees an opportunity to apply its EoHFC experience in the retail business market.
“We offer an interesting EoHFC product that plays really well in the carrier market,” Lewis said. “There is an interesting space for EoHFC in retail that we’re hoping to cultivate.”
However, Comcast did not provide a specific timeline yet.
Comcast is hardly alone in its desire to offer businesses EoHFC connectivity.
Fellow cable MSO WOW! has been moving in a similar direction. In 2016, the cable MSO began developing an EoHFC product that will offer retail and wholesale customers a set of SLAs.
The service provider recently introduced a best effort Ethernet over HFC wholesale service to customers in its network area. It launched that service to target service provider customers that need to fulfill connections for multisite off-net business customers. It can also be used to fulfill branch, remote offices and even small- to medium-sized businesses within a metro area.
Charlie Reed, partner for Atlantic-ACM, told Fierce Telecom that EoHFC certainly provides an opportunity for cable to take share in the dedicated internet access (DIA) and Private Line-based Ethernet transport markets.
“Customers who need a dedicated connection for a specific application, and do not have access to fiber, would be happy to have more options for services,” Reed said. “If speed increases from 10mb to 50mb or 100mb, EoHFC could be a good replacement for existing DS3 lines as well as open up Cable’s addressable market for additional customers.”
Complementing DOCSIS, fiber
By offering a higher speed EoHFC product, Comcast Business would be able to target businesses with yet another option for businesses.
The cable MSO recently announced more markets for its DOCSIS 3.1-based internet service across its northeastern footprint. Comcast plans to roll out the DOCSIS 3.1-based service throughout its national network footprint and will deploy on a rolling basis through the fall.
As it rolls out DOCSIS 3.1-based services to more business customers, Comcast Business could enhance the speeds it offers over EoHFC. Today, the service provider offers a 10 Mbps speed for EoHFC.
“With the inception of DOCSIS 3.1, we do have the opportunity to increase the speed profile,” Lewis said. “We’re looking at increasing speeds beyond 10 Mbps.”
By extending Ethernet services across its markets, Comcast has been able to retain a sixth-place ranking in Vertical Systems Group’s U.S. Ethernet Leaderboard. Having yet another tool in its war chest could potentially enable Comcast to gain further Ethernet market share where it may not have built out fiber yet.
Despite the allure of EoHFC, Reed said the near-term opportunity for cable’s business play resides with fiber-based and DOCSIS-based services.
“I think the cable companies will still focus mostly on selling fiber dedicated internet and broadband to businesses,” Reed said. “The vast majority of Cable’s dedicated Internet sales are fiber as most companies purchasing dedicated internet want more bandwidth than the 10 Mbps available with EoHFC.”
Special access role
Cable may still be an insurgent player in the business and wholesale market segments, but EoHFC has taken on a prominent role in special access, or what’s called the business data services (BDS) market.
Service providers have used EoHFC to satisfy off-net connectivity for their business customers where they don’t have network facilities.
Reed said that the near-term target for cable’s EoHFC will be in the wholesale market where business-centric service providers are looking for alternatives to traditional copper-based BDS circuits.
“The more promising opportunity for EoHFC is on the wholesale side,” Reed said. “Wholesale buyers are eager to move from DS1 and DS3 to EoHFC to provide access for their IP-VPN customers."
Reed added that “we have seen cable rapidly increase share of last-mile access wholesale circuits and we expect that to continue given the size of their EoHFC footprint.”
EoHFC has been offered by Comcast and other cable MSOs as an alternative product for special access services.
Cox said in a 2016 FCC filing that its EoHFC service enables customers to "extend the reach of [their] LAN to multiple locations," and that its business services are backed by "industry-leading SLAs," which demonstrate its "commitment to providing . . . the highest level of service and support."
Cox also offers a coax-based Ethernet product that supports multipoint-to-multipoint Ethernet services for business and wholesale customers.
Cable’s role in the business data services (BDS) market became a source of controversy between former FCC Chairman Tom Wheeler and the incumbent telcos when he tried to reform the rules.
Traditional telcos like CenturyLink use cable providers' Ethernet over HFC facilities itself to fulfill large customer needs as it expands its service footprint outside of its traditional wireline territory. Telcos have cited the use of EoHFC as a proof point that the BDS market offers a number of competitive choices for service providers.
CenturyLink launched an initiative in 2014 to expand the amount of non-ILEC Ethernet Local Access (ELA) providers as a way to increase the number of locations it could reach with Ethernet services.
In a 2016 FCC filing, CenturyLink said the telco’s out of region customers don't know the difference whether their services are being carried over fiber or HFC.
"For most of CenturyLink's customers, cable-provided Ethernet-over-HFC and Ethernet-over-fiber services are indistinguishable in performance," CenturyLink said.
However, competitive carriers such as Level 3 and Windstream say that the Ethernet over hybrid fiber coax (EoHFC) facilities provided by cable operators aren't suitable substitutes to fulfill business service requests.
Level 3 and Windstream said the jitter levels associated with EoHFC are too high to satisfy customers that want dedicated services, for example.
“Ethernet-over-HFC is not typically offered subject to SLAs with performance commitments for jitter," EarthLink and Level 3 said.